2004 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit
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___________ No
. 03-1045

___________ LE ON R. D ON GE LE W ICZ ; M AR GA RE T J. D ON GE LE W ICZ , Hu sban d and Wif e; FR AN CIS X. B UR NS ; LA UR A B UR NS ; LO IS A . BU RN S; G EO RG E M . DE PE RS IA ; SH AR ON M
. DE PER SI A, Hus ba nd and Wi fe ; J OHN B. KNOX; BETS Y C. K NO X, H usba nd an d W ife; *E ST AT E O F JO HN T. M IEL E; FRAN K J. RACH UBINSK I; HELEN A . RACH UBINSK I, Husband an d Wi fe ; SE NTA M. SHE RI DAN; GER D. J. SMI T; WACL AW SZC ZES NIA K; D AN UT A S ZC ZES NIA K, H usband and W ife, For Themselves and on Behal f of allOthers Simi larl y Si tuate d, Ap pellan ts v. *PN C B AN K N AT ION AL AS SO CIA TIO N, Su ccessor by M erger to F irst E aste rn B ank ,** B AN KS HA RE S R EA LT Y C OM PA NY , Suc cesso r to First E astern Co rp.; FR AN K M . CE DR ON E; C.B .G. L IM ITE D, A Pen nsylvan ia Lim ited Pa rtnersh ip; ONE IDA W ATER COM PANY , A Company Organized Under t he La ws of P enn sylvan ia; V AL LE Y U TIL ITI ES CO M PA NY , IN C., A Pen nsylv ani a Cor

por at io n; MLA MANAGEM ENT ASSOC, A P enns ylvania C orpo ration; R AL PH CO NT E; A RL EN E R EIN ES S; THE PR OPERT Y OWNERS AS SOCI ATI ON OF THE VALLEY

OF LA KES, An U nincorpor ated Associ ation *(Amended Per Clerk' s Order dat ed Janaury17, 2003) **(A mend ed Per C ourt Ord er dated A pril 23, 2003)

___________ On A ppeal from the Un ited States District Co urt for the M iddle D istrict of P enns ylvania Distri ct Court J udge: The H onorab le James F . McC lure

(D.C. Civi l No. 95-cv- 00457 )2 ___________ Argued on January26, 2004 Bef ore: NY GA AR D, F UE NT ES , and ST AP LE TO N, Circuit Judges
. (Opinion Fi led: J uly 23, 2004)
Roger S. Antao (argued) Enna Chuang Antao & Chuang 2337 Lemoine Avenue Suite 101A Fort Lee, NJ 07024 Attorn eys for App ellants Steven A. Arbit

tier (argued) Darry l J. May Tho mas B. R ober ts Michael N. Gordan Ballard, Spahr, Andrews & Ing ers oll , LLP 1735 Market Stree t, 51s t Floor Philadelphia, PA 19103 Attorney s for Appel lees PNC B ank, N.A. and Ban ksha res R ealty Company

________________________ OPINI ON OF THE COURT

________________________1 We will refer to Fir st Eastern Bank, N.A. and i ts par ent, First Eastern Corpor ation, colle ctive ly , as “Fi rst Eas tern. ” First Eastern was ac quired byPNC B ank, N.A. and byan Order dated January 17, 2003, PNC w as substituted for First Eastern. How ever, because the ev ents at iss ue he re occ urred prima rily before 200 3, w e w ill refer to th e relev ant pa rty as F irst E aste rn. 2 CBG , Frank Cedrone ( a generalpartner of CBG), Oneida Water Company and Vall ey Utili ties Company, I nc. (two CB G-related corporat ions that provi ded water and utili tites to VOL) defaulted, and MLA Management Associates , Inc. (“MLA”), Ralph Conte, Ar lene Ra ines s, an d th e Pr ope rty Ow ner s A sso ciatio n of VO L se ttled wit h D ong elew icz. 3 FUEN TES, Circuit

Judge: This appealinvolves a real estate development known as Vall ey of t he Lakes (" VOL") lo cated n ear

th e Po con os i n Haz le to n, Pen nsylv ani a an d de vel ope d byCBG Lim ited ( "CBG" ), a Pe nns y lv ani a Li mited P ar tn er ship. On Ju ne 1 7, 199 4, LeonR. Dongelew icz and ten other sets of VOL lot own ers (“Dongelewicz”) comm enced a class acti on against

the owners and manager s of VOL as well as Fir st Eastern Bank, N.A., the development’s primary source of financing, al leging years of fraud and broken prom ises. 1 As o f the d ate of this app eal, First E astern is the on ly remain ing d efen dant. 2 Dongelewicz appeals a September 30, 1999 decision of the District Court which decertified the cl ass acti on, granted summary j udgment to Fi rst Eas tern, and denied appel lants ’ motion for leav e to s upp lem ent th e co mp laint . W e ag ree w ith th e D istrict Co urt a nd a ffir m.

I. Background The f acts, as exhau stively recounted in D ongelew icz’s 157-pa ge com plaint, are well known to the parti es. We onlydiscuss those t hat are relevant to our

discuss ion of the issues on appeal. In September of 1986, CBG acquired VOL, a 4000 acre tr act of l and4

parti ally subdivi ded for res identi al and re creational de velopment. From the regi stration of the lots in 1 987 until ab out 1 989 , the V OL deve lopm ent did we ll, selling lots to individual pu rchasers and beginning to construct am enities. Potential lot purchase rs were told t hat the development would eve ntuall y i nclude roa ds, a cent ral s ewer sy stem, an 18- hole g olf co urse a nd “L ake A lgon quin .” Do ngele wicz claim s that C BG neve r intend ed to
com plete the p rom ised am eniti es. As C BG ’s prim ary sourc e of f inanc ing, Firs t Easte rn B ank m ade its in itial loans to CBG in 1988: a $5 mi lli on revolvi ng development l oan and a $2 mill ion rece ivable line of credi t. Thes e amounts were i ncreased a nd by the end of 1989, t he Development Loan was at $11,500, 000 and the Recei vable Line at $10,000, 000. The Development Loan was secured bya firs t mortgageon the proper ty owned by CBG. The primarycollateralfor the Receivable Line were CBG's acc ounts re ceivabl e on notes s ecured bypurchase money
mo rtga ges , ("L ot P ape r") w hich lot o wn ers in VO L p rov ided to C BG wh en b uying lots. CBG financed up t o 90% of the lot price, and First Eastern a dvanced 90% of the finance d
amo unt to C BG . Wh en m ortgag e paym ents w ere m ade to C& E C redit, the f und s wo uld be w ired to F irst E aste rn a s pa ymen t on the r ece ivab le lin e. Alth oug h First E astern adva nced the en tire De velop men t Loa n to C BG , their in spe ct or s f

oun d that

th e i mpr ove ment s de sc ri bedin th e Pr ope rty Repo rt s f il ed b y CBG with HUD w ere not c ompleted bythe dat es speci fied i n those r eports . In November 1990, C BG failed to me et obligations un der the terms o f its loans from First Eastern because mort gagors were no l onger making enough pay ments on CBG's purchas e money5

mo rtga ges for the r ece ivab les to con stitute ade qua te pa ymen t on the r ece ivab le loa n. CBG attempted to sellor re-finance the development with no success. D on ge lew icz co nt en ds th at d ur in g t hi s p er io d b etw ee n N ov em be r 1 99 0 a nd C B G 's declar ation of

bankruptcy

in 1992, Fi rst Eas tern under took a scheme t o conceal t he insolvency of CBG. VO L was hav ing cash-flow difficulties and First Eastern made cash infus ions a nd lo ans to CB G to keep the de velop men t alive an d there by prese rve the ir col la te ra l. Dong el ewi cz c har acter iz es th es e ac ti ons as a s che me de si gne d t o al lo w CBG to appear solvent to purchas ers, property owners, mortgagors , part icipant banks, bank regulators and HUD, and to conti nue to perpe trate its land fraud. On M arch 30, 1992, CBG file d for Chapter 11 bankruptcy

in the Middl e District of Pen nsylv ani a, cl ai min g i t wa s ne ces sa ryin or der to comp le te th e de vel opme nt . CBG became debtor- in-poss ession, and enter ed into an agreement wit h MLA Management Associat es to monitor thei r acti ons. Dongelewicz contends t hat, after CGB 's de claration of bankruptc y, First

Eastern c oncealed t

he income st

ream on the r eceivabl es from the B an kr up tcy c ou rt, i n e ff ec t si ph on in g m illi on s o f d ol lar s o f th e b an kr up tcy e sta te's recei vables. Dongelewicz als o alle ges that , duri ng this period, First Eastern mai led out mortgage coupon bookl ets t o the mortga gors, naming themsel ves and not CBG as paye e, and h ired M LA M anag eme nt A ssocia tes to ac t as their re prese ntative at VO L to c losely
mon itor the collection and e xpend iture of fund s, and to dev elop a bu dget for C BG . In response, First

Eastern argues that the acti ons it took, i ncluding t

he cash advances and6

loans, were done to pre serve i ts col late ral and t herefore provided for by an order of t

he ban kru ptcy c our t date d O ctob er 2 2, 19 92. In February 1995, CBG was removed as debtor -in- possessi on and a trus tee was appointe d. In 1996, a joint venture of

Double Diamond Inc. and t he Valleyof the Lakes Civic Associ ation ( "VOLC A") acquir ed VOL. First Eastern had bythis time been acquire d by PNC, and PNC released i ts i nteres ts i n VOL for les s than $1, 200,000, resul ting i n a loss of

over $20 mill ion. On Ju ne 17, 19 94, Do ngelew icz com menc ed this action in the U .S. District Court for the Dis tri ct of New Jerseyagainst CBG , Frank M. Cedrone, Oneida Water, Val ley Utilities, First Eastern, ML A, Ra lph Co nte, and A rlene Rain ess. On F irst Eastern’s motion t o dismis s, the District Court dismis sed allcounts exce pt two, one file d pursuant to the Racketeer Influenced and Corrupt Organizations Act ( RICO) 18 USC §§ 1961- 1968, and the other f

iled unde r the common law of New Jerseyfor fraud and de ceit . The case was thereafter

trans ferred to the Middle Dist rict of Pennsy lvania

by a March 15, 1995 o rder. A class an d subclasse s were c ertified on Jun e 19, 199 6. Abo ut two years la te r, Dong el ewi cz f

il ed a mot io n t o su ppl emen t t he Co mpl ai ntas se rtin g ne w RICO clai ms against

First Eastern ba sed on the al legation that during CBG’s bankrupt cy, the bank recei ved mortgage pay ments due to CBG and fraudule ntly concealed receipt

of tho se p ayme nts f rom the b ank rup tcy co urt. On September 30, 1999 the District Court decertifie d the cl ass action, gr anted
sum mary jud gm ent to F irst Eas tern, an d den ied ap pellan ts’ mo tion fo r leave to7

supplement t

he complaint . The District Court ori ginall y certifi ed issue s for an interlocutor

y appea l on February 8, 2000, however thi s court denied permissi on to appeal at that ti me. This court’s j urisdi ction i s pursuant to a Fed. R.Civ.P. 54(b) certifi cati on issu ed b y the D istrict Co urt a nd 2 8 U .S.C . § 12 91.

II. DIS CUSS ION A. Leave to Amend and Supplement We first a ddress Dongele wicz’s moti on to amend the compl aint to include allegations that the m ortgage pa yments received by First Eastern from lot own ers were fraudule ntly

concealed from the bankrupt cy court. ( App 2341) The Distri ct Court de nied Dongelewicz’s motion to amend hol ding that the suppl emental RICO clai ms were barred byt he st at

ut e o f l i mi t ati on s and t he r ef or e “ am en dm en t wo ul d b e f uti l e. " ( Ap p 1 71 ) We
rev iew this d ecis ion for abu se o f dis creti on. The four-y ear st atute of limi tati ons for RICO claims begi ns to run when a pl ainti ff kne w o r sho uld hav e kn ow n th at he has bee n injure d. Mathews v. Kidder, Peabody Co. , 260 F.3d 239, 247 ( 3d Cir. 2001) . In t he proposed suppl ement, Dongele wicz all eges that First Eastern vi olate d RICO, injuri ng the bankruptcy es tate and the l ot owners by receiving payments on the mortgage notes after CBG had filed for bankruptcy. These alle gations do not ari se from the s ame conduct al leged i n the Complaint , so the sup plem ent c ann ot re late b ack und er F ed.R .Civ .P. 1 5(c )(2) t o th e da te of filin g. However, as the Dis tri ct Court f ound, al l of the alle gations made in the pr oposed8

supplem ent conce rn cond uct wh ich cam e to the attention of the lot own ers over six years before the y moved f or leave to sup plemen t in 1998. T he supp lemental claim s were theref ore unti mely. The lot owners kne w that CBG was in bankruptcyas of it s fil ing on M arch 3 0, 199 2. By A pril 199 2, the lo t ow ners’ m ortgag e che cks w ere m ade p ayable to and endorsed for

deposit by Fi rst Eas tern ( App 5558-61), and t he bankruptc y st ay, which theynow allege Fi rst Eas tern was vi olati ng by cas hing their checks, was issued on March 30, 1992. Becaus e we agree that the suppl emental cl aims were unti mely, we affirm the Dis trict C our t’s de nial o f lea ve to am end
. B. Decertif

icati on We review a class decertific ation f or abuse of di scretion. See Holmes v. Pensi on Plan of B ethlehem Steel Co rp . 213 F .3d 12 4, 136 (3d C ir. 2000 ). Ab use o f discr etion is found “where the di stri ct court 's de cisi on rest s upon a clearlyerroneous finding of fact, an errant conclusion of law or an improper application of law to fact. " Id . (i nternalquotati on omitted) The D istrict Court decertified the c lass, holding that the ap plication of the "injury plus pattern disco very rule," in evaluating the statute o f limitations defen se, wou ld require indivi dualiz ed inquiries i nto diff ering fa ctual circumst ances and therefore de certi fication is appr opriate. Under theinjury pl us pattern rul e, the limi tati ons peri od begins when the plaint iff knew or shoul d have known that the defendant enga ged in a pattern of racket eering a ctivi ty and that the plainti ff was injured by t he patt ern of racke teeri ng acti vity .” See, e. g. , Perlber ger v. Perlberger , 1999 WL 79503, *3 (E.D. Pa. Feb. 12,9

1999). Dongelewic z correc tly notes t hat the injury pl us pattern dis coveryrule i s no long er the la w in this circu it. Shortly af ter the D istrict Co urt’s de certifica tion ord er, in Rotell a v. Wood , 528 U.S. at 549 (2000) , the Supreme Court abrogated the injury pl us patte rn rul e and repl aced it with the “ injury di scovery ” rule of Forbes v. Eagleson , 228 F.3d 47 1, 484 (3d Cir. 2000 ), cert deni ed , 533 U .S. 929 (200 1). Und er the injury discovery rule, a RICO claim accrues when the plai ntiff knew or should have known of his in jury. Dongelewicz argues that t he injur y di scoveryrule presents none of the comp lexities that led the District Cou rt to decertify the class under the injury plus pattern rule. H ow ever, th is argu men t defie s com mo n sen se be caus e, as the cour t expla ined in Forbes , the new rule "al ter[s ] the j udicia l lands cape unfavorabl y t o the plainti ffs from the shap e in w hich it e xisted w hen th is case wa s bef ore the district co urt" an d req uires u s to "conside r the ca se under an ac crual r ule more adver se to pl ainti ffs than t hat the dist

rict court appl ied. " 228 F.3d at 424. In fac t, a s Firs t Easte rn point s out, the new rule may mean that al l cla ss members' clai ms are barred by t he stat ute of l imit ations . Dongelewicz
ar gue s that

eve n i f the n ew r ul e i s " stri ct er " than th e ol d, it doe s no t r equ ir e the s ame indivi dualiz ed inquir

y that compell ed the Dist rict Court to dec erti fy, but there is no r eason to beli eve that

the Dist rict Court' s conclus ion regarding the ne ed for indi viduali zed inquiry is no longer true u nder the ne w rule. U nder the injury discove ry rule, the court must stilldetermi ne when each lot purchaser, by the exerci se of dil igence, should have discovered she was inj ured. With respect to the f raud claims, t

he District Court

held that10

March 30, 1992 was the l atest date anyreasonabl e person would have di scovered her injury. However, setting the precise date for e ach plai ntiff, give n the dif fering circum stance s of th eir pur chas e and ow nersh ip of th e lots, still req uires a n "ex treme ly fac t-spe cific " ind ivid ualiz ed in qui ry. Mathews v. Kidder , 260 F.3d 239, 250 (3d Cir. 200 1). Th e D istrict Co urt's app lication o f the in jury disco very rule to the fra ud cla im is not an apt

analogyhere becaus e, as t his court explained in Mat he ws , "the focus of accr ual in a RICO action i s different from that for afraud cl aim where the foc us is on t he acts of the defendant s" which are common to all pl ainti ffs – "a RICO claim accr ues when the plaintiffs s hould have discovered their injuri es." Id , at 251 . The Distric t Cou rt wa s we ll within i ts di scretion decertifying the c lass i n light of the st atute of limi tati ons defense, and that de certi fication remai ns vali d under the ne w injurydiscovery rule. C. Summary Judgment 1. RIC O C laim To establ ish a RICO violat ion under § 1962, plaint iffs must prove (1) the conduct (2) o f an ente rpris e (3 ) thro ugh a pa ttern (4) o f rac kete erin g ac tivity. Sedima, S. P.R.L. v. Imrex Co. , 473 U .S. 479 , 496 ( 198 5). To recov er un der civ il RIC O, an injury to plaint iff’s business or property must have been pr oximatel y caus ed by t he § 1962 violat ion. The "c onducted the affair s of an ente rpri se" el ements of § 1962(c ) are s atis fied by showing t

hat a defendant

"participate[d] i n the operation of management of the enterprise i tself. " Reves v. Ernst & Young , 507 U .S. 170, 183 (1993).11

In gra nting s um mary jud gm ent to F irst Eas tern, the Distric t Cou rt relied p rimarily
on Rolo v. City Investing Co. Liquidating Trust , 155 F.3 d 64 4 (3 d C ir. 19 98)
. Ro lo involved a

resi dentia l land de velopment sc heme in which lot purchaser s all eged that the develop er, GD C, com mitted RIC O pred icate acts by making promises c oncerning future develop ment they nev er intended to k eep. The lot purchasers a lso sued sec ondary defend ants, who were n ot alleged to ha ve participated in the fraudulen t sales, but were alle ged to have enabl ed GDC to perpet uate i ts fr aud by cont

inuing to finance t

he development des pite knowle dge of the fr aud, and bytheir concealment

of it. Plaintiffs also alleged that

the financiers, by doing the same sorts of thi ngs alleged against First Eastern he re, had e xercis ed controlover the e nterprise. The district c ourt di smissed t he complaint , findi ng that t he acti vity

did not cons tit

ute operation and management of the
en ter pr ise as re qu ire d b y Reves . We affirmed, holding t hat the alle gations against the financi ers made out an aiding and abetting claim, which was no l onger viabl e after the Supreme Court' s decis ion in Central Bank of Denver v. Fir st Interst ate Bank of Denver , 511 U.S . 164 (19 94)
. Do ngele wicz is corre ct to po int out th at Ro lo does not control here because although t

hose fact s are appea lingl y si milar to those we face here, i n that c ase, we did not disc uss the D istrict Co urt's ru ling con cern ing the " ope ratio n an d m ana gem ent" test. Ho we ver, in h is den ial of m otions for re cons ideratio n, Jud ge M cClu re clarif ied his invocation of Ro lo . He e xplain ed tha t he did not h old tha t Ro lo control led on the Reves issue, but rat

her noted t

hat "Fi rst Eas tern' s role was analogous t o that pl ayed by the12

‘secondary defendants' in Ro lo " and held th at "sinc e First E astern did n ot partic ipate directly in the affairs of the en terprise and can not be he ld civilly l iable (under Ro lo ) as an aider and abettor, i t cannot be liable. " In Univ. of Md. v. Peat , 996 F.2d 1534 ( 3d Cir. 1993) , poli cyhol ders cl aimed that Peat' s provis ion of accounting and othe r financ ial s ervice s to an i nsurer s atis fied the Reves standar d. We explai ned, however, that " [s]i mply bec ause one provi des goods or servic es that u ltimately be nefit th e ente rprise d oes n ot me an tha t one b ecom es liable under RICO as a result. " Id , at 153 9. W e hav e also s tated, alb eit in the f raud conte xt, that " we are unwill ing to hol d that mer elybecause a l ender requires sec urity and appr oval of aspects of construction, t he lender thereby t akes ‘control' of the project. To do so
wo uld w reak h avoc on th e lend ing ind ustry, for an y lender w ho re ason ably wis hed to protect its elf would be for ced to run t he ris k of being sued for the unknown fraudul ent acts of its borr owers." Bhatla v. U .S. Capital Co rp ., 990 F.2 d 78 0, 77 8 (3 d C ir. 19 93)
. While it is certainl y t

rue that a major cr editor

of a corporat

ion can have “s ubstantial persuasi ve power” and some legalauthori ty over management, alone, such power is “ not equival ent to ha ving the power to conduct or parti cipat e direc tly or indi rectl y i n the conduct in the affairs of those corporati ons." Strong & Fisher Ltd. v. M axima L eather, Inc. , 1993 W L 227 05, *1 (S.D .N.Y., July 22, 1993 ). We agree with that anal ysi s. Fi rst Eas tern was merel y a l ender - i t suppl ied fina ncin g fo r a d eve lop me nt th at fa iled, a nd t hen too k ste ps to pre serv e its c ollat eral. Such involvement

does not suppor

t a fi nding that

it “c onducted” the affair s of any13

“enterprise” un der Reves (be it CBG , VOL, or an associ ation i n fact of t he various defe ndan ts). We theref ore af firm th e D istrict Co urt’s gra nt of S um mary Ju dgm ent as to the § 196 2(c ) clai ms . Although § 1962(c) was the focus of Dongele wicz’ ori ginal c laim, in thi s appeal his emph asis shifts. Based o n the D istrict Court's characterization of F irst Eastern’s actions as "aidi ng and abetting", Dongelewicz argues that the bank’s conduct violates § 196 2(a ) an d § 1 962 (d). Section 1962( a) prohi bits the inve stment of i ncome derived fr om a pattern of racket eering a ctivi ty , bya "pri ncipal " in anyracket eering a ctivi ty that a ffects i nters tate or for eign com me rce. D ong elew icz c orre ctly no tes th at "p rinc ipal" is de fine d in 18 U .S.C . § 2 as any one who " ai ds, abe ts , c oun se ls , c omman ds, in duc es orpr ocu re s" a RI CO violation. Ho wev er, contrary to Dong elewicz’ asse rtions, the District Cou rt did not err "as a m atter of law," simp ly by granting sum mary jud gm ent as to § 19 62(a ) wh ile simult aneouslynoting t hat the evidence, at best , might be suffici ent to e stabl ish ai ding and abetting. Alt

hough First

Eastern mayhave rei nvested t he income rece ived from the Mortgages into VO L, the lot owners had contractual obligations to pay t heir mortgages, and suc h pa ymen ts do not con stitute the p roc eed s of rack etee ring activ ities. Section 1962( d) of RICO makes it “unl awful to conspire to vi olate [§§ 1962(a), (b) or (c) ]." I n Smith v. B erg , 24 7 F .3d 53 2 ( 3d C ir. 2 00 1) , w e a do pt ed th e S up re m e C ou rt's analy sis i n Salinas , which hel d that § 1962( c) li abili ty is not a prerequi sit e to § 1962(d) liabi lit y. Rather, conspir acy l iabil ity under § 1962(d) does not r equire s atis facti on of the14

Reves test , but i s governed bythe "gener al pri nciple s of cri minal conspiracylaw" which requires only that the def endan t "share[s] a com mon purpose " with his co -conspirators and "knowinglyagrees t o facil itate a scheme, which i ncludes t he operation or managem ent of a RICO enterprise. " Sm ith 247 F.3d at 538 . As F irst Eas tern arg ued in its
mo tion fo r sum mary jud gm ent, the f act tha t First E astern prov ided f inanc ing to C BG in no way gives rise to an inf erence ( i) t

hat Fir st Eastern agree d to commit pr edicat e acts; or (i i) th at Fi rs t E as te rn kne w th at th e p re di ca te ac ts wer e p art o f r ac ke te er in g a ctiv it y , two
nec essa ry elem ents of a RIC O c ons pira cy. Dongelewicz addit

ionall y ar gues that

the Dist rict Court erred as a matter of la w because i t err oneouslyimposed the “ conducti ng the affai rs of the enterprise ” element of § 196 2(c) o nto § 196 2(d). W e agre e w ith the D istrict Co urt, how ever, th at, at bes t, Dongelewicz "coul d prove nothi ng more than that Fir st Eastern faci lit ated the conduct of CB G's bu siness b y provid ing fin ancin g, w hich it h ad a c ontrac tual ob ligation to do ." This conduct does not

violate § 1962(d). Accordingly , we agree wit h the Dist

rict Court that "ther e is no evi dence to suppor t a cl aim that

First Eastern directl y participated i n fraud or extortion...nor does it s upport a cl aim of conspi racy ." We there fore affi rm the Dist rict Co urt’s dec ision on t his is sue . 2. Co mm on L aw Fra ud C laim The statute of l imit ations for fraud i n Pennsyl vania i s two ye ars. A claim accrue s when injuryis suff

ered and the stat

ute begi ns to run when the injured person knows or reasonabl y shoul d know that he has be en injured and that his i njuryhas been cause d by15

ano ther par ty's con duc t. Ingenito v. AC&S, Inc. , 633 A.2 d 11 72, 1 174 (Pa . Su per . 199 3). Dongelewicz’s primaryfraud the ory is that Fir st Eastern fai led to di sclose the prec arious financi al condi tion of CBG to plai ntiff s prior to CBG’s bankruptcy . Even assumi ng arguendo that t

his cl aim could suppor

t a cause of acti on for fraud, we agree with the Distri ct Court t

hat Dongelewicz a nd his fel low lot owners were injured when they pu rc ha se d l ot s in V O L a nd th eir cla im s th er ef or e a cc ru ed by 1 99 0. T he re fo re , C B G 's fili ng of bankruptc y on March 30, 1992 was t he latest point at which the st atute of limitation s wa s trigge red fo r all plain tiffs be caus e it gav e any rea sona ble pe rson c ause to know of the financi al st atus of CBG and of the fact that Fi rst Eas tern had not discl osed that f inan cial s tatus to D ong elew icz. Dongelewicz rel ies on EB S v . B ar cla y's , 304 F.3d 302, 306 (3d Cir. 2002), but that case is not dis positive here . In EBS , we h eld tha t the filing of b ankr uptcy do es no t alert a reasonabl e plai ntiff

to the c ause of the insol vency a nd does not t rigger the runni ng of the stat ute of l imit ations as to t hat fraudulent c ause. Here, it i s not the cause but the fact of the ins olvencythat i s in i ssue – a fact that was al legedl y conce aled fr om the plai ntiff s by the a ction s of Firs t Ea stern , but wa s m ade plain upo n fili ng o f ba nkr upt cy. Seek ing to e scap e the sta tute of limitation s prob lem, D ong elew icz sug gests th at, after CBG file d for bankruptcy, First Eastern e ngaged in a “mass ive bankruptcy fr aud.” To the extent

that pl ainti ffs suggest

that t he stat ute of l imit ations with res pect t o theirprebankruptcy

fail ure to di scloseclai m should be tol led becaus e an all eged fraud upon the bankruptcy

court l ulled t

hem into not

pursuing t

heir cl aim, that argument fail s. As the3 We do not examine whether any alle ged "fraud upon t

he bankruptc y court" amounted to a new, actionable fraud cl aim. As we noted above i n addressi ng the 1998 propos ed supplement to plaint

iffs'RICO claims, pl ainti ffs' complaint as fil ed does not al lege such events or alle gations with res pect t o First Eastern ha ving engaged i n a "fraud upon t he ban kru ptcy c our t."
4 Dongelewicz als o briefl y ar gues in hi s opening brief that mortga ge coupon books mailed byC&E Credit to mortgagors amounted to fr aud because they r equested t hat payment be made to Fir st Eastern Bank as opposed t o CBG , the reby “misrepresenti ng” First Eastern a s the entity

mortgage pay ments were owed to. Additional ly , Dongelewicz takes i ssue with one tax st atement mai led to one mortgagor–det aili ng the amount of interest t hat mortga gor paid i n 1993–because the statement indi cated that it was from 16 District Court noted, this all eged fraud wo uld “not alter t he notice of financial tr oubles” plaintiffs received when C BG f iled for bankruptcy and would not operate to conceal First Eastern’s alleged failure to disclose C BG ’s financial con dition to the lot ow ners befo re the bankruptcy. See Beauty Time, Inc. v. VU Skin Systems, Inc. , 118 F.3d 140, 146 (3d Cir. 1997 ) (explaining the d octrine of frau dulent con cealmen t). 3 Dongel ewic z has al so s ugge st ed that , du ri ng CBG’s bankrup tc y, CBG and MLA made various misrepresentations to t he lot-owners. Dongelewicz alleges that First Easte rn ha d kn ow ledge of the se m isrepre sentatio ns, bu t, as the D istrict Co urt pro perly concluded, “plai ntiff

s’ attempts to place l iabil ity for the a ctions of MLA [and CBG] on First Eastern ba sed on agencysimplyare not s upported bythe rec ord; ‘ approval’ of an acti on is not

agency .” (App. 203. ) Plai ntiff s “had the burden of proving a n agency relat ionshi p before [MLA’s or CBG’s] actions could be attri buted to and binding on” Firs t Ea stern . Bolus v. United Penn Bank , 525 A.2 d 12 15, 1 221 (Pa . Su per . Ct. 1 987 ). Sim ply put, D ong elew icz ha s not m et that b urde n. N o evid ence of an agen cy relations hip has been offer ed 4First E astern Ban k and not C BG . The se theo ries of fraud , how ever, w ere no t adva nced in

Dongelewicz’s c omplaint . Of course, “a contention in a brief” “cl early
. . . may not” be used to “s ubsti tute f

or an all egati on in a complai nt,” William s v. N ew Cas tle Co unty , 970 F.2d 1260, 1266 n.4 (3d C ir. 1992), es peciallyin the context of a fraud claim, which must be pled w ith particularity under Fed. R . Civ. P. 9(b).
17 Ac cord ingly, we agree with the D istrict Co urt that F irst Eas tern is en titled to
summ ary judgmen t on Do ngelew icz’ claim of c omm on law fraud an d we therefore aff irm.

III. CONCLU SI ON For th e reaso ns disc ussed abov e, we find th at the D istrict Co urt w as w ithin its discre tion to d eny D ong elew icz leav e to file a supp leme nt to the com plaint a nd to decertifythe cl ass action. Furthermore, we find that the Dist rict Court properly granted summary j udgment on Dongelewicz’ RICO clai ms and correctly dismis sed the fr aud cla im as un tim ely. W e th er ef or e a ff irm th e ju dg m en t o f th e D ist ric t C ou rt in its en tire ty.